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2019.10.25 NRA Answer to Counterclaims

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2019.10.25 NRA Answer to Counterclaims Case 3:19-cv-02074-G Document 17 Filed 10/25/19 Page 1 of 49 PageID 194 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF TEXAS DALLAS DIVISION NATIONAL RIFLE ASSOCIATION OF AMERICA, Plaintiff and Counter-Defendant and Wayne LaPierre, Third-Party Defendant, v. Civil Action No. 3:19-cv-02074-G ACKERMAN MCQUEEN, INC., Defendant and Counter-Plaintiff, and MERCURY GROUP, INC., HENRY MARTIN, WILLIAM WINKLER, MELANIE MONTGOMERY, AND JESSEE GREENBERG Defendants PLAINTIFF THE NATIONAL RIFLE ASSOCIATION OF AMERICA’S ANSWER TO DEFENDANT ACKERMAN MCQUEEN, INC.’S COUNTERCLAIM Plaintiff National Rifle Association of America (the “NRA”) files its Original Answer to Defendant’s Counterclaim (see ECF No. 12) as follows:1 1 Mr. Wayne LaPierre has not appeared in this action and has not been served with process. The NRA is not responding on his behalf. Case 3:19-cv-02074-G Document 17 Filed 10/25/19 Page 2 of 49 PageID 195 COUNTERCLAIM AND THIRD-PARTY COMPLAINT Becoming Actor, AMc (“Counter-Plaintiff’) brings this Counterclaim against the NRA as Counter-Defendant, and its Third-Party Complaint against Wayne LaPierre (“LaPierre”), Executive Vice President of the NRA, in his individual capacity. RESPONSE: None required. PARTIES 1. Counter-Plaintiff has appeared herein by contemporaneously filing this Answer, counterclaim and Third-Party Complaint. RESPONSE: The NRA admits the allegations in paragraph 1. 2. Counter-Defendant has appeared herein and is before the Court for all purposes. RESPONSE: The NRA admits that it has appeared in this case, but denies it is “before the Court for all purposes.” 3. Third Party Defendant Wayne LaPierre is a resident of the State of Virginia who may be served with citation at his place of business, 11250 Waples Mill Rd., Fairfax, Virginia 22030. RESPONSE: The NRA admits that Mr. LaPierre is a resident of the State of Virginia and that his place of business is located at the specified address. The remaining allegations of paragraph 3 are denied. 2 Case 3:19-cv-02074-G Document 17 Filed 10/25/19 Page 3 of 49 PageID 196 JURISDICTION AND VENUE 4. This Court has personal and subject matter jurisdiction concerning Third Party Defendant LaPierre pursuant to 28 USC 1332(a) and the amount in controversy exceeds $75,000. In addition, the counterclaims asserted herein include compulsory and permissive actions. Venue is proper in the Northern District of Texas, Dallas Division. RESPONSE: The NRA admits that venue is proper in this district. The remaining allegations in paragraph 4 are statements or conclusions of law to which no response is required, or allegations about which the NRA lacks knowledge or information sufficient to form a belief as to their truth, and the NRA, therefore, denies them. PRELIMINARY STATEMENT A. Counterclaim. 1. Despite its seemingly benign veneer, the instant case is driven by Counter- Defendant’s and LaPierre’s sinister and intentional efforts to destroy AMc’s business. Counter- Defendant’s lawsuit invites – indeed, mandates – an inquiry into the NRA’s and LaPierre’s conduct. It makes relevant an examination of the real reasons behind termination of the parties’ operating agreement (the “Services Agreement,” as amended) and an examination of the creation, operation and unquestioned success of NRATV (a digital network dedicated to the advancement of 2nd Amendment issues), that lays bare the falsity of the NRA’s “failed endeavor” contention. RESPONSE: The NRA denies the allegations in paragraph 1, but notes that, as asserted in the First Amended Complaint in greater detail (filed contemporaneously herewith), AMc and its 3 Case 3:19-cv-02074-G Document 17 Filed 10/25/19 Page 4 of 49 PageID 197 representatives have since at least 2016 engaged in an overarching and interconnected scheme that, among other things, fraudulently induced the NRA into agreeing to launching, and then expanding, the failed digital media platform known as NRATV by making knowingly misleading statements (accompanied by the creation of out-of-context and deceptive “viewership statistics”) concerning the platform’s actual and potential financial viability and performance. 2. Two events have combined to cause the NRA to switch from friend to foe: (1) the advent of the law firm of Brewer, Attorneys and Counselors, and its principal Bill Brewer (“Brewer”) whose ascendency within the NRA has resulted in the NRA embarking on a reckless and self-destructive path, in the process taking down numerous other important service providers and individual NRA leaders and others with it; and (2) AMc’s refusal, including a series of events in 2018 to acquiesce in the financial adventurism and organizational mismanagement of NRA’s leader, LaPierre. This combination of events has found malicious voice in this, the fourth frivolous lawsuit launched against AMc as well as in lawsuits against Andrew Cuomo, Governor of New York and New York’s Chief Insurance Regulator; another unfounded lawsuit against Lt. Col. Oliver North (“North”) the NRA’s one-time President, for having the temerity to demand an audit of Brewer’s $97,000.00 per day legal bills (totaling over $24 million for just over one year’s activity); and has led to the voluntary resignation of several NRA board members who wanted no part of fiduciary risks being taken; and the enforced ouster of officials and attorneys accused of allegedly “conspiring” to oust LaPierre from his position.2 2 See, e.g., news articles describing this recent frenetic activity and Brewer’s role: Non-Profit News Quarterly, (https://nonprofitquarterly.org/why-someone-should-make-the-NRA-into-a-tv-series; Washington Post, https: //www.washingtonpost.com/politics/how-a-hard-charging-attorney- helped.fuel-a-civil-war-inside-the-NRA); https://www.nytimes.com/2019/08/22/us/politics/nra- guns-wayne-lapierre.html. 4 Case 3:19-cv-02074-G Document 17 Filed 10/25/19 Page 5 of 49 PageID 198 RESPONSE: The NRA denies the allegations in the first sentence. The NRA admits that it has filed meritorious lawsuits against (i) Defendant AMc; (ii) Andrew Cuomo and the New York State Department of Financial Services for civil rights violations that survived a motion to dismiss and now remains in the discovery phase of the case; and (iii) Mr. Oliver North, a case in which the NRA recently prevailed. The NRA denies the remaining allegations in paragraph 2. 3. The facts supporting this Counterclaim makes clear that it is AMc which has been victimized by the machinations of the NRA, LaPierre and others, and not as portrayed by Counter- Defendants. RESPONSE: The NRA denies the allegations in paragraph 3. B. Third Party Action 4. The NRA’s case also opens the door to an exposition of the fraudulent conduct of LaPierre, (particularly as it relates to NRATV) his profligate misuse of NRA members’ dues, for personal and family benefit, his flaunting of non-profit corporation law, and the reckless abandon with which he and his enabler Brewer have run roughshod over the NRA Board of Directors as well as the NRA Foundation Board of Directors in multiple respects (including failure to obtain prior board approval for his lawsuits against AMc and firing the Board’s counsel). It also calls for scrutiny of his personal exposure for libelous statements against AMc, his interference with Third Party NRA Contracts and the fraud he has perpetrated on AMc, particularly with respect to NRATV. All of these areas of inquiry will reveal that what is at the root of Counter Defendant’s and LaPierre’s effort to scapegoat AMc is the plan to deflect attention from their own misdeeds and to inflict maximum damage on Counter-Plaintiffs. It is LaPierre, with Brewer’s assistance, whose artifice has caused AMc serious damage, for which he must pay. 5 Case 3:19-cv-02074-G Document 17 Filed 10/25/19 Page 6 of 49 PageID 199 RESPONSE: The NRA denies the allegations in paragraph 4. 5. This Counterclaim and Third-Party Complaint seek to not only restore AMc’s reputation; they also seek to hold accountable the NRA and LaPierre, whose dictatorial actions have neutered the NRA as a political force while inflicting serious collateral damage on AMc. RESPONSE: The NRA states it lacks knowledge or information sufficient to form a belief about the truth of the allegation about AMc’s motives in filing the Counterclaim and Third-Party Complaint in this case and otherwise denies the remaining allegations in paragraph 5. BACKGROUND FACTS C. Decades of Harmony Coincide With the Emergence of LaPierre. 6. For almost four decades AMc served the NRA expertly, helping the gun rights organization navigate troubled political and societal waters as its principal communication strategist and crisis manager. The beginning of the relationship followed NRA management’s decision to completely outsource its public relations work to AMc. AMc effectively crafted the NRA message and burnished its image as the most visible Second Amendment advocacy group in the United States. RESPONSE: The NRA admits that for almost four decades AMc served as a communication strategist and crisis manager for the NRA but denies the remaining allegations in the first sentence. The NRA denies the allegations contained in the second sentence. The NRA admits that it is the most visible Second Amendment advocacy group in the United States but denies the remaining allegations in paragraph 6. 6 Case 3:19-cv-02074-G Document 17 Filed 10/25/19 Page 7 of 49 PageID 200 7. LaPierre, a one-time Democratic legislative aide, began his NRA career in 1977 as a lobbyist. Described in news reports as “reserved” and “awkward”3 he was seemingly ill-suited to head what many describe as a strident advocacy group.
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